Rangarajan to Patel: why RBI matters more to Aam Aadmi

New chapters in 20 yrs: Surge in credit to bond market, equities to forex transactions

WHILE INDIANS mostly lived out of their savings till two decades ago, the appointment of RBI governor did not mean much for the common man then, except for the fact that lending and term deposit rates for banks were regulated by RBI till the 1990s — the term deposit rate was deregulated in 1998-99. Today the central banker’s decisions matter more than ever. Here’s why:

HOME, PERSONAL LOANS: There has been a big rise in the number seeking home loans. While home loan accounts with scheduled commercial banks stood at 3.25 lakh in March 2001, they have grown by over 22 times to 71.6 lakh accounts in March 2016. In line with the rise in number of accounts and jump in ticket size of loans, the outstanding credit on these accounts has spiked from Rs 11,890 crore in March 2001 to Rs 7,46,800 crore in March 2016. Similarly, personal loan accounts have grown to over 5.2 crore as of March 2016.

INFLATION: Although inflation has always been a key consideration for RBI while framing its monetary policy, inflation targeting has now become its primary goal. For the next five years, the target has been set at 4 per cent plus-minus 2 per cent.

CURRENCY, EQUITY MARKETS: With more buoyant and broad-based equity markets (over 2.4 crore demat accounts) and over 4.6 crore retail mutual fund accounts, the RBI’S interest rate calls and guidance on the economy impact the common man more than ever. Even FII interest is huge as their net investment in Indian equities has risen from Rs 10,800 crore in 1996 to Rs 11.43 lakh crore.

BOND MARKET: While the retail exposure to the bond market was insignificant two decades ago, it is growing by every passing day on account of retail investors investing in government securities and other debt papers through debt mutual funds. The government has also now permitted retail investors to directly invest in government securities.

LIBERALISED REMITTANCE SCHEME: There have been significant changes in regulations for remitting money abroad after the Liberalised Remittance Scheme (LRS) in February 2004 which permitted resident individuals to remit up to $25,000 a year. The current cap is $250,000 a year for buying shares or property or for studies every year. 2015-16 witnessed record outflow of $4.6 bn. MY FIRST official interaction with the pink ball wasn’t ideal — I couldn’t sight it during our first practice session. It was brighter than your average SG ball, especially when new. But luckily, while playing for India Red in the Duleep Trophy match against India Green, where the pink ball was used for the first time in an official domestic game in India, I faced the new ball in the afternoon and didn’t have much of a problem.

The unique thing about this ball is that the seam is not as prominent as with the red or white ball. The seam had more white in it when they used a pink ball for the Australia-new Zealand Test last year in Adelaide, and many had complained about not being able to spot it. At the stadium in Greater Noida, where we played our match, we faced a black seam.

Yet, a lot of batsmen struggled early on, and some got bowled while being late on shots. You couldn’t be sure of which way the ball was going to move because the seam was not visible, and many felt there was exaggerated movement with the new ball.

But one good thing about the ball is that it remains harder for longer, and comes on to the bat unlike the SG ball which can become soft. So you can play your strokes once you overcome the early jitters. I was also happy to see the spinners generate decent turn whenever they gave it a rip.

These are exciting times to be a cricketer. The pink ball and playing under lights in whites was such a unique experience. There’s still a lot of talk about the timings and how there is a tea-break first and then a dinner-break, which we have never experienced before.

After you come out from the dinner break, it’s pitch dark outside the turf, you are playing under lights, and it’s a completely different game. With the match getting over at 10.30 pm, our day finishes very late. You end up in bed till late and spend most of the mornings sleeping, eating well and recovering. I had breakfast at noon, for example. Being an overnight batsman and having to spend more than half the day waiting to walk in to bat is new, too.

But then, cricketers are used to adapting quickly -- and we will get used to this too. (As told to Bharat Sundaresan)

C Rangarajan (above) was RBI chief in 1996; Urjit Patel takes charge next week